NorthEast Community Bancorp, Inc. Reports Results For the Fourth Quarter and Year Ended December 31, 2019

WHITE PLAINS, N.Y., Feb. 07, 2020 (GLOBE NEWSWIRE) -- NorthEast Community Bancorp, Inc. (the “Company”) (OTCPX: NECB), a majority owned subsidiary of NorthEast Community Bancorp, MHC, and the parent holding company of NorthEast Community Bank (the “Bank”), reported net income of $2.76 million for the quarter ended December 31, 2019 compared to net income of $4.92 million for the quarter ended December 31, 2018.  For the year ended December 31, 2019, the Company reported net income of $12.76 million compared to net income of $13.03 million for the year ended December 31, 2018.

Financial Condition and Operating Results for December 31, 2019 compared to December 31, 2018:

Net income before taxes for the three months ended December 31, 2019 was $3.62 million compared to $6.23 million for the three months ended December 31, 2018.  The decrease in net income before taxes was the result of a credit to provision for loan losses of $2.32 million for the three months ended December 31, 2018 compared to no provision for loan losses for the three months ended December 31, 2019.

Net interest income for the three months ended December 31, 2019 decreased by $685,000, or 6.85%, to $9.32 million from $10.00 million for the three months ended December 31, 2018.  The decrease in net interest income was the result of three interest rate cuts in 2019 by the Federal Reserve that impacted the yield on our construction loan portfolio.

The Company had a credit of $2.32 million in provision for loan losses during the quarter ended December 31, 2018 compared to no provision for loan losses during the quarter ended December 31, 2019.  The credit of $2.32 million in provision for loan losses was primarily due to recoveries totaling $2.70 million as a result of a settlement attributable to two loans totaling $3.13 million that were fully written off during the September 30, 2018 quarter.

The allowance for loan losses was $4.61 million as of December 31, 2019 compared to $4.20 million as of December 31, 2018.  The increase in the allowance reflects the growth in our construction loan portfolio, which currently represents 61.85% of our total loan portfolio, partially offset by the lower loss factors on construction loans due to their positive credit performance and lower loan balances on other segments of our portfolio.

Total consolidated assets increased by $84.75 million, or 9.74%, to $955.07 million at December 31, 2019 from $870.32 million at December 31, 2018.  Loans receivable (net) remained unchanged at $747.88 million at December 31, 2019 from $747.84 million at December 31, 2018, while commitments, loans-in-process and standby letters of credit outstanding decreased to $434.26 million at December 31, 2019 compared to $458.05 million at December 31, 2018. 

Total liabilities at December 31, 2019 were $813.06 million compared to $740.71 million at December 31, 2018, an increase of $72.35 million, or 9.77%.  The increase in total liabilities was primarily due to a $92.06 million increase in deposits from $687.10 million at December 31, 2018 to $779.16 million at December 31, 2019.

Federal Home Loan Bank advances declined to $21.00 million at December 31, 2019 from $42.46 million at December 31, 2018.  The decrease in Federal Home Loan Bank borrowings was the result of several payoffs of maturing advances.

Total stockholder’s equity increased by $12.40 million, or 9.57%, to $142.02 million at December 31, 2019 from $129.62 million at December 31, 2018.  The increase was a result of net income of $12.76 million for the year ended December 31, 2019, partially offset by dividends declared and paid during the twelve month period.

Financial Condition at December 31, 2019 compared to September 30, 2019:

Total consolidated assets decreased by $83.37 million, or 8.03%, to $955.07 million at December 31, 2019 from $1,038.44 million at September 30, 2019.  Loans receivable (net) decreased by $14.20 million or 1.86% to $747.88 million at December 31, 2019 from $762.08 million at September 30, 2019, while commitments, loans-in-process and standby letters of credit outstanding decreased to $434.26 million as of December 31, 2019 compared to $451.00 million at September 30, 2019.  The decrease in total assets was due to decreases in our cash and cash equivalents as we funded the intentional run-off of high cost sourced deposits and borrowings.  The decrease in loans receivable (net) was due to decreases in our real estate mortgage and commercial and industrial loan portfolio, partially offset by an increase in our construction loan portfolio.

Total liabilities at December 31, 2019 were $813.06 million compared to $899.02 million at September 30, 2019, a decrease of $85.96 million, or 9.56%.  The decrease in total liabilities was due to an $85.22 million decrease in deposits from $864.38 million at September 30, 2019 to $779.16 million at December 31, 2019.  Federal Home Loan Bank advances declined to $21.00 million at December 31, 2019 compared to $21.95 million as of September 30, 2019.

Non-performing loans remained unchanged at $3.95 million, or 0.41% of total assets at December 31, 2019 compared to 0.38% of total assets at September 30, 2019.

NorthEast Community Bancorp, Inc.’s total stockholders’ equity at December 31, 2019 is a strong 14.87% compared to 13.43% at September 30, 2019.

About NorthEast Community Bancorp, Inc. - NorthEast Community Bancorp, Inc. is the holding company for NorthEast Community Bank. NorthEast Community Bank is a New York State-chartered savings bank that operates six full-service branches in New York State and three full-service branches in Danvers, Framingham and Quincy, Massachusetts and loan production offices in White Plains and New City, New York.

This release contains “forward-looking statements” that are based on assumptions and may describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by the use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors that could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, changes in market interest rates, regional and national economic conditions, legislative and regulatory changes, monetary and fiscal policies of the United States government, including policies of the United States Treasury and the Federal Reserve Board, the quality and composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area, changes in the real estate market values in the Company’s market area and changes in relevant accounting principles and guidelines. These risks and uncertainties should be considered in evaluating any forward-looking statements and undue reliance should not be placed on such statements. Except as required by applicable law or regulation, the Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

Kenneth A. Martinek

Chairman and Chief Executive Officer

(914) 684-2500